Women don’t commit as much corporate crime as men

October 14, 2013

Orange may be the new black, but that doesn't mean female executives are committing much corporate crime. (Barbara Nitke/Netflix)

Even in corporate crime, women hit the glass ceiling.

Just nine percent of those who commit major corporate fraud are women, according to a recent study published in the American Sociological Review. And when they team up with men to commit the fraud, they reap less of a profit than their male co-conspirators.

Far less, based on the study’s review of several years of corporate fraud cases.

In mixed-sex schemes, most of the male offenders gained a half-million dollars or more, the analysis said. But 56 percent of the women did not profit at all, and 8 percent profited very little. Less than 10 percent of defendants who made very high illicit gains were women. (Of course, those who are caught and convicted in the schemes don't get to keep those profits.)

Yes, women are less likely to occupy the top management positions that open up some opportunities for lucrative financial fraud, said Darrell Steffensmeier, lead author of the study and a sociology professor at Pennsylvania State University. Typically, they’re not high enough up the chain to give themselves bonuses, raises or kick-backs, Steffensmeier said.

But there’s also a more nuanced side to the gender gap.

For starters, the old boys’ network thrives in corporate crime schemes, which tend to be group-centric, Steffensmeier said. Women are bypassed when opportunities arise.

“Men lead these conspiracies, and men generally prefer to work with men,” Steffensmeier said. “If they do use women, they use them because they have a certain utility or they have a personal relationship with that woman and they trust her.”

Gender expectations and risk preferences also play a role. Even if women had equal opportunities to commit a serious corporate crime, they are less likely to take risks for economic gain, according to the study, co-authored with Jennifer Schwartz of Washington State University and Michael Roche of  Pennsylvania State University. (Women also tend to make better investments than men because of this caution, other research shows.)

“Risk-taking and defying social convention are qualities more admired in men than in women,” the study said. “By extension, men find it easier than women to justify illegal wrongdoing because law-violating behavior, especially for status-seeking or financial reasons, is more compatible with male focal concerns.”

The researchers examined 83 corporate frauds involving 436 defendants from July 2002 through 2009. All were "major" indictments initiated by the Justice Department’s Corporate Fraud Task Force. By major, they mean cases involving fraud to cover up a corporation's true financial health, Ponzi schemes and insider trading -- as opposed to low-profit schemes such as embezzlement, where some studies suggest that women are on near equal footing with men.

Of the 436 defendants studied, only three women were ring leaders or co-leaders. The pattern is the same in burglary rings, gangs and other underworld crime networks, an area Steffensmeier and others have examined more thoroughly.

The analysis raises an obvious question that the authors said they can’t yet answer definitively:  Would having more female corporate leaders reduce corporate crime?

There’s ample reason to believe it would, the authors concluded. But they also said that  it’s plausible that “women who move up the corporate ladder will be socialized into the ethos of commercial interests and market dominance at all costs.”

Dina ElBoghdady covers housing policy for The Washington Post.
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